How You Can Help Your Parents Financially Without Going Broke

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

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Most of us want the people we love to be financially secure, especially our parents. But sometimes it’s complicated trying to figure out how you can help your parents as they get older.

That’s because many aging Americans have little to no retirement savings. A report from the U.S. Government Accountability Office found that nearly three in 10 adults ages 55 and over had no retirement savings in 2013.

But as your parents approach retirement – for which they may be ill-prepared – you have your own financial responsibilities and demands to consider.

“The sandwich generation is feeling torn between obligations to their aging parents and responsibility to their children,” says Annalee Leonard, owner of Mainstay Financial Group in Pensacola, Fla.

So how can you help parents without compromising your own money goals? Here are 10 steps you can take to help build a secure future for the whole family.

10 step program for helping your parents financially

1. Get honest about their situation

My mom turns 60 this month, putting both of my parents near retirement age. But we’ve never actually had a conversation about what their financial situation looks like. So though I worry about them, I don’t know if I should.

How can you help your parents if you don’t know if they even need it? Helping your parents financially starts with an honest conversation. Leonard recommends sitting parents down now before there’s a need.

“It should be done calmly over a breakfast or lunch – no alcohol involved,” she says. “[Ask] ‘do you have a long-term care plan? If so, we need to know what it is since we would be the ones who will help you to implement this if the need arises’.”

And if your parents don’t have a retirement plan, you should know about that, too.

2. Work with your parents to make a plan now

Few retirement or long-term care plans are perfect. You may find out during a discussion with your parents that they need help in one way or another.

“Address the issue before it’s an emergency,” suggests Michael Minter, managing partner of Mintco Financial.

Take the time to identify potential problems and start working on solutions. It might also take a few meetings to go over all of their finances and address various issues.

Minter says it’s important for you to remind your parents to keep an open mind. “[Your parents have to] be willing to re-evaluate their current budgets and be open to advice if they want the situation to change.” After all, there’s only so much you can do on your own to help them.

3. Get siblings on board

If you have siblings or other family members who can offer support, loop them into the conversation. That way you can pool resources and implement solutions together.

Teamwork will stave off the resentment of one child feeling like they are unfairly bearing the burden alone of helping parents financially. It will also help to spread out the responsibility, so what you give can go further.

“Everyone should chip in with money or time, whatever is needed,” says Leonard.

4. Prioritize your own financial health

Whatever help you plan to give parents, make sure it’s affordable for you to give.

“Do not be a martyr,” Leonard warns. “You’re not going to help anyone if you derail your own retirement for your parents or kids.”

Rather than offering financial aid from the get-go, you can help your parents learn how to use their own resources more wisely.

“Your parents need to use their own assets to finance their care,” explains Leonard. Then you can consider chipping in with an amount that’s reasonable and won’t derail your financial goals.

5. Gift them a session with a financial planner

Consider hiring a financial planner to help you and your parents create a strategy that puts their assets to the best use. You can even offer to set it up or pay for it.

“Advisors can help bridge the gap between parents and adult children and also help ask any awkward money questions,” Minter says.

Look for a financial planner who has experience with in-retirement planning and elder care. You may also want to consider hiring other experts, Leonard says, including an elder law attorney and a tax professional.

6. Research government benefits and assistance programs

When caring for aging parents, government programs can provide key financial help.

“Use the programs that you have in your local community that are there for very little or no cost,” Leonard says. “Find out what is in your community to serve you.”

Start by checking out this guide to federal aid for caregivers from the AARP to see what’s out there. Then help your parents navigate the process of signing up for and receiving these benefits. A few options to consider include:

  • Low-income senior housing
  • Supplemental Nutrition Assistance Program (SNAP)
  • Medicaid
  • Social Security income and Social Security Disability income

Many cities, states, or communities also have local programs to assist senior residents and their families.

7. Consider long-term care insurance

In addition to addressing immediate needs, try to figure out how to pay for future needs.

For instance, do your parents have sufficient savings to cover the cost of elder care should they need help with daily life as they age? If the answer is no, then you should probably consider long-term care insurance.

This works like most insurance options: you or your parents pay a premium. Then if your parent should need care such as a health aide or living in a nursing home, the insurance will cover the costs.

8. Put a bill in your name

You might be reluctant to just hand cash over to parents for a number of reasons. Therefore, Minter suggests picking up some of their bills and putting them in your name instead.

“In some cases, you can pay for your parents’ medical bills in a way that won’t be considered a gift for tax purposes,” Minter adds.

9. Pay down a parent’s debts

In addition to taking over a bill, consider making payments toward your parents’ debts.

Remember, the more debts your parents have, the more debt payments they’ll have to keep up with in retirement. This will eat up their cash flow and make it harder to live on a limited income.

By paying off or taking over a parent’s debt, however, you free up their cash flow. If you’d like more control over the account, you could also refinance their debts with a personal loan in your name.

However, it’s important to get your parents to commit to avoiding future debts. Paying their debts now won’t help them if they just run up new debts later.

10. Lower expenses to free up cash flow

If you can’t take over a bill or debt, you can do some legwork to help lower your parents’ expenses. Help them shop around for cheaper prices on insurance, cable, or other bills.

And if they have various debts, you can research refinancing or debt consolidation options for them that could help lower their costs. You can also help them downsize their home or refinance their mortgage for lower monthly payments.

Check in on their finances regularly

The sooner you and your parents can get on the same page and plan for the future, the better. It will give you more time to find solutions and grow their nest egg. But executing that plan is a process that will span the last decades of their lives.

You’ll need to check in with your parents regularly about their financial situation and ensure everyone’s doing their part. Once everyone’s on the same page, you can all work together to ensure your parents’ golden years are their best ones yet.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderAPR RangeLoan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal Loans: Fixed rates from 6.990% APR to 14.865% APR (with AutoPay). Variable rates from 6.255% APR to 12.555% APR (with AutoPay). SoFi rate ranges are current as of September 1, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.255% APR assumes current index rate derived from the 1-month LIBOR of 2.08% plus 4.425% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

    To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.See Consumer Licenses.
  2. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  3. SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.
  4. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

3 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 4.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 4.99% APR loan, a borrower will need excellent credit on a loan of $15,000 with a term of 24 months, and qualify for at least two of the following discounts: (1) add a co-borrower who has sufficient income; (2) use at least fifty percent of the loan proceeds to directly pay off existing debt; or (3) show proof of having at least forty-thousand dollars in retirement savings – contact FreedomPlus for further details.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

5 Important Disclosures for LendingPoint.

LendingPoint Disclosures

  • Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint’s final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 15.49% APR to a high of 34.49% APR, with terms from 24 to 48 months. The loan offer(s) shown reflect a 28 day payment cycle which is being offered as a courtesy as many of our customers are paid on a biweekly schedule and thus this may better align the loan payment dates with your actual income receipt schedule.

6 Important Disclosures for LendingClub.

LendingClub Disclosures

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.


7 Important Disclosures for Earnest.

Earnest Disclosures

  1. Earnest does not lend in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

8 Important Disclosures for Avant.

Avant Disclosures

* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.

** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33


* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

7.73% – 29.99%$1,000 - $50,000Visit Upstart
6.26% – 14.87%1$5,000 - $100,000Visit SoFi
6.99% – 35.97%*$1,000 - $50,000Visit Upgrade
8.00% – 25.00%2$5,000 - $35,000Visit Payoff
4.99% – 29.99%3$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%4$5,000 - $50,000Visit Citizens
15.49% – 34.49%5$2,000 - $25,000Visit LendingPoint
6.16% – 35.89%6$1,000 - $40,000Visit LendingClub
6.99% – 18.24%7$5,000 - $75,000Visit Earnest
9.95% – 35.99%8$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.